Carreras expects another $1.8b back from Gov't
CIGARETTE distributor, Carreras Group expects to receive $1.8 billion in tax refunds in its current financial year from the Tax Administration of Jamaica (TAJ).
Carreras was awarded over $3.5 billion in a legal fight with TAJ of which $1.7 billion represents the principal with interest as the balance, according to financials posted to the Jamaica Stock Exchange (JSE).
"During the year, TAJ commenced refunds to Cigarette Company of Jamaica (CCJ) by issuing offsets against the estimated tax liability of Carreras Limited in the aggregate amount of $1.7 billion. The company expects to recover a further $1.81 billion over the next twelve months," stated financials about Carreras' subsidary CCJ currently in voluntary liquidation.
Last December, Carreras reached an agreement with the TAJ and the Ministry of Finance & Planning to recover the $1.73 billion plus interest of $1.78 billion on the outstanding sum.
"The interest receivable by CCJ has been fully recognised in these financial statements," stated the financials.
In 2004, Cigarette Company of Jamaica (CCJ) received assessments for income tax claimed by the tax authorities for the years 1997-2002 amounting to $5.68 billion, including penalty and interest.
CCJ appealed the assessment. Whilst the appeal was in progress, CCJ paid an amount of $1.73 billion to TAJ. CCJ appealed the assessment and on March 13, 2012, after a volley of judgements and appeals in lower courts, the Privy Council handed down its decision dismissing the appeal of the TAJ with costs to CCJ.
Carreras made $4 billion net profit in its full financial year ending March 2014 which represented one-third less profit from the $6.2 billion earned a year earlier. Health Minister Dr Fenton Ferguson introduced a ban on public smoking effective July 15, 2013. From that time, Carreras executives started seeing a dip in sales.